Shaw and Partners is pleased to be appointed as Joint Lead Manager to a proposed capital raising by Beston Global Food Company Limited (ASX.BFC).

South Australia’s largest dairy company, Beston Global Food Company is raising $28.2m by way of a ~$3.3m placement and $25m rights issue.

The offer is priced at $0.025, representing an attractive 59.7% discount to last close and 39.2% discount to TERP.

• Firm commitments for $25m of the $28.2m have been secured from existing and new shareholders
• Under new CEO Fabrizio Jorge, Beston has now enjoyed progressive quarters (Q4FY22 and Q1FY23) of positive EBITDA at a BFC Group level
• NPAT positive for Beston Pure Dairy (BPD is over 90% of group sales)
• Following a record Q1 with sales of $46.6m the business is now returning to profits after the debilitating effects of the COVID-19 era and looking at value focused growth opportunities
• $16m of the new capital is to be used to reduce gearing providing material interest cost savings
• The balance of funds raised will be deployed for earnings accretive, rapid ROI operational improvement and growth initiatives including:
• $3m for a high margin 3rd column lactoferrin extraction plant which is expected to generate positive EBITDA in 2024. This additional capacity is largely underpinned by customer demand.
• $5m to establish a cheese secondary processing / shredding facility; and,
• the balance of funds raised to be directed to water, energy and other plant improvements. All expected to generate positive a contribution to EBITDA within 6 months of implementation

The combination of the initiatives delivered under the capital raising is expected to materially improve on the FY23 EBITDA guidance of $8-10m in FY24.

The offer is available to Australian Sophisticated and Professional Investors only.

For more information about the offer please contact your Shaw and Partners adviser.